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Debt Freedom? Canadians expect to be debt free by age 56: CIBC Poll

However, more than half of Canadians 65+ are still carrying some form of
debt

TORONTO, July 27, 2015 /CNW/ - A recent poll by CIBC (TSX: CM) (NYSE: CM) finds that on average, Canadians expect to be debt
free by the time they are 56 years old although some Canadians see themselves carrying debt well into their
sixties. In addition, nearly a third (29 per cent) say they have no debt while 13 per cent say they will never be debt free.

Highlights of the poll include:

56 is the average age Canadians expect to be debt free

21 per cent say they will be stuck with debt until they are over 65 years old

29 per cent say they are completely free of debt today

13 per cent say theywill never be debt free

"While Canadians expect to be debt free by age 56 on average, not
everyone will hit that goal, which means a significant number of
Canadians will still be carrying debt during retirement," says
Christina Kramer, Executive Vice President, Retail and Business
Banking, CIBC. "As debt repayment goals push closer to retirement age,
it puts an added strain on your ability to save for retirement and
manage your cash flow after you retire."

More than half of Canadians 65 and over still owe money

The poll found that over half of Canadians aged 65-plus say they still
carry some form of debt today, with credit card debt and lines of
credit as the most common types. This group also said they didn't
expect to have their debts paid off until they are 70 years old on average.

"Cash flow becomes a top priority in retirement, and having to make debt
repayments out of your income will create a drag on your finances and
your ability to have the retirement you want," adds Ms. Kramer.

Younger Canadians optimistic about debt repayment

Canadians 25-34 years of age have ambitious plans for debt repayment.
This age group on average expects to be debt free by age 47. However, a closer look at those currently carrying debt suggests this
may be an optimistic goal, as more than 68 per cent of Canadians 45 and over still carry debt, including 31 per cent who still carry a mortgage.

"What people need to remember when attempting to shorten the road to
debt freedom, is that paying down debt is just one part of a broader
financial plan that needs to include saving for retirement, managing
day-to-day expenses and maintaining an emergency fund," Ms. Kramer
says.

Balancing debt repayment and savings goals

Of all Canadians with debt, 32 per cent say theyhave made sacrifices or cut spending to better manage their debt this
year and 25 per cent say they have made at least one lump sum payment towards their debt on
top of regular payments. This aligns with a CIBC poll conducted last December which found that paying down debt was the top
priority for 2015.

"As our poll findings show debt repayment remains a top priority for
Canadians, it's encouraging to see that many Canadians with debt are
setting goals and taking action to pay it off," Ms. Kramer says.

Three steps to create a debt freedom plan

Becoming debt free takes time and dedication. It's best to have a clear
plan that outlines the steps you should take each month to get closer
to your goals over time. Here are a few tips for putting your plan on
paper:

Step 1: Assess your debt. Make a list of everything you owe, who you owe and when the payment is
due. Be sure to note the interest rate and monthly payment amount,
separating out how much goes towards interest as opposed to principal.

Next, add up the individual debts to find your total outstanding
balance, and how much you are paying each month in interest to service
those debts. Talk to a financial advisor about possible ways to
structure your debt and potentially lower your interest costs.

Step 2: Set priorities. It's essential to make at least the minimum payment due on each debt to
avoid penalties and to keep your credit rating intact. Beyond the
minimum, focus your attention first on the debts that are costing you
the most — those with the highest interest rate.

Step 3: Establish a timeline. Like any goal, it's helpful to have a deadline; it gives you a "finish
line" to work towards. Keep it realistic and achievable. This is where
it can really help to talk to a financial advisor.

KEY POLL FINDINGS

Average age Canadians expect to be debt free:

Current age range

Average age they expect to be debt free

All

56 years

18-24

39 years

25-34

47 years

35-44

52 years

45-54

58 years

55-64

64 years

65+

70 years

Average age Canadians expect to be debt free, by region:

Region

Average age expect to be debt free

All

56 years

British Columbia

56 years

Alberta

54 years

Manitoba/Saskatchewan

61 years

Ontario

55 years

Quebec

57 years

Atlantic Canada

58 years

When Canadians expect to be debt free, by age range: (* indicates sample size too low to report individually)

When Canadiansexpect to be debt free

Percentage of Canadians

18-24 years

*

25-34 years

5%

35-44 years

7%

45-54 years

13%

55-64 years

31%

65+ years

21%

I will never be debt free

13%

I don't know

8%

Percentage of Canadians who currently have the following types of
personal debt:

Percentage of Canadians who say they do not have any personal debt, by
age range:

Current age range

Canadians with nodebt

All Canadians

29%

18-24 years

50%

25-34 years

17%

35-44 years

18%

45-54 years

24%

55-64 years

31%

65+ years

44%

What Canadians have done so far this year, if anything, to tackle their
debt:

Made sacrifices/cut spending in order better manage your debt

32%

Set up/made regular payments on my debt

32%

Made at least one lump sum payment towards your debt on top of regular
payments

25%

Increased my debt repayment amount

19%

Implemented a household budget

19%

Worked more hours/got a second job

13%

Accelerated my debt repayment schedule

12%

Talked to a financial advisor about better managing your debt

8%

Consolidated my debt

7%

Refinanced my mortgage

5%

None of these

25%

On June 3 and June 5 2015, an online survey was conducted among 3,013
randomly selected Canadian adults who are Angus Reid Forum panelists.
The margin of error - which measures sampling variability - is +/- 1.80
per cent, 19 times out of 20. The results have been statistically
weighted according to education, age, gender and region (and in Quebec
language) Census data to ensure a sample representative of the entire
adult population of Canada. Discrepancies in or between totals are due
to rounding.

About CIBC
CIBC is a leading Canadian-based global financial institution with
nearly 11 million personal banking and business clients. Through our
three major business units - Retail and Business Banking, Wealth
Management and Wholesale Banking - CIBC offers a full range of products
and services through its comprehensive electronic banking network,
branches and offices across Canada with offices in the United States
and around the world. You can find other news releases and information
about CIBC in our Media Centre on our corporate website at www.cibc.com.